December 18, 2012
Fiscal Situation ‘Stable’ For Most States; NCSL Releases Comprehensive 50- State Budget Update
In the wake of the worst economic downturn since the Great Depression, more states are reporting good news rather than bad, according to the National Conference of State Legislatures’ (NCSL) Fall State Budget Update report.
The report’s findings are based on a comprehensive survey of legislative fiscal officers in all 50 states and the District of Columbia. Items addressed in the report include: state revenue performance, revenue outlook for the remainder of the fiscal year, over-budget spending, and historical comparisons to previous economic recoveries.
“Overall, the recovery for states is stable, with half of the states expecting to return to peak revenue levels by the end of this fiscal year,” said Arturo Pérez, program director of NCSL’s fiscal affairs program.
Perez and Todd Haggerty, authors of the NCSL report, will be available for a conference call with members of the media today (Tuesday, Dec. 18) at 2 p.m. EST. To join the call, please dial 1-866-939-8416, and use participant code 8922312.
According to the report, revenue performance remained solid for most states through the first quarter of Fiscal Year (FY) 2013. More states reported strength rather than weakness in three major tax areas—personal income, sales and corporate income. The majority of states report that they expect to meet or exceed general fund revenue targets. Only Idaho, Maine and New Jersey reported all three tax categories are performing below forecasts.
For most states, revenues continue their slow climb out of the recession and the outlook for the remainder of the budget year indicates continued improvement. By the close of FY 2013, at least half of all states will have returned to peak collections not seen since FY 2008. However, in a change from last year when no states reported pessimism, a handful of state officials believe they are unlikely to meet the revenue forecast in FY 2013. Officials in four states—Alaska, Maine, New Jersey and New York are pessimistic about the revenue outlook.
Generally speaking, state spending is in line with budgeted estimates, though more states appear to be facing spending overruns than at this time last year. Eighteen states reported that at least one area of spending is significantly over budget in FY 2013 compared to 11 states in FY 2012.
In a historical comparison with recovery periods following previous recessions, the post-Great Recession has been underwhelming. Compared with previous recovery periods, it has taken five long years before cumulative general fund revenue collections are projected to finally return to peak levels. Similarly, officials in 27 states reported that general fund revenue growth rates are lower than growth rates from previous recoveries.
Credentialed members of the media may receive a free full copy of NCSL's "State Budget Update: Fall 2012.” The link to the report provided in this release does not contain links to the detailed 50-state tables. Please contact the press room to obtain a complete copy of NCSL's budget report. This report is also available for purchase in NCSL's bookstore.
NCSL is a bipartisan organization that serves the legislators and staffs of the states, commonwealths and territories. It provides research, technical assistance and opportunities for policymakers to exchange ideas on the most pressing state issues and is an effective and respected advocate for the interests of the states in the American federal system.